Senators Raise Concerns about CFPB's Data Collection

CFPB U.S. Senate Privacy/Cyber Risk & Data Security

On April 23, the Senate Banking Committee held a hearing during which CFPB Director Richard Cordray testified on the CFPB’s semiannual report to Congress. A substantial portion of the hearing focused on the CFPB’s collection and use of data. Republican committee members led by Ranking Member Mike Crapo (R-ID) criticized the CFPB’s data collection efforts and its developing ability to “watch” consumers, and questioned the CFPB’s legal authority to collect data that could be reverse engineered to connect with specific consumers. Mr. Cordray explained that “big data” is the cutting edge of research in every field and that the CFPB needs to keep pace with financial institutions. According to Mr. Cordray (i) the CFPB’s data are not connected to individuals (aside from complaint data) and are “anonymized”, (ii) much of the data come commercial resources already accessible to firms, (iii) the CFPB obtains certain data from the same sources other regulators have in the past, and (iv) all of the data are essential to the CFPB’s ability to carry out its congressionally mandated work, including rulewriting, reporting to Congress, and undertaking other studies. The hearing also covered numerous other topics including (i) the impact of CFPB’s mortgage rules on small institutions, (ii) the CFPB’s collection and assessment of consumer complaints, (iii) coordination of examinations and information requests among federal and state regulators, and (iv) the status of the CFPB’s arbitration study, portions of which the CFPB may release this year.